Trend Reversal: ETFs Suffer Outflows in February

Investors pulled nearly $6 billion out of exchange-traded funds in February, the first time ETF fund flows have been negative in nearly a year.

The new data, compiled by the National Stock Exchange and published on Wednesday, reversed the strong trend seen in January 2009 and December 2008. That's when investors poured more than $80 billion into ETFs.

Month	ETF Fund Flows
Feb-09	(5,794)
Jan-09	41,989
Dec-08	42,841
Nov-08	26,375
Oct-08	7,303
Sep-08	57,662
Aug-08	11,336
Jul-08	13,986
Jun-08	9,350
May-08	2,947
Apr-08	(334)
Mar-08	20,071

The bulk of the outflows can be laid at the feet of a single fund, the S&P 500 SPDRs (SPY), which saw $13.6 billion in net outflows.

That gigantic move overwhelmed the positive flows into funds like the SPDR Equity Gold ETF (GLD), which led all ETFs with $5.6 billion in inflows; GLD closed the month with $31.5 billion in assets. The Market Vectors - Gold Miners (GDX was second, with $1.1 billion in inflows, followed by the U.S. Oil Fund (USO) at $924 million. Other funds to make the top ten on inflows were the iShares Barclays TIPS ETF (TIP) at $840 million and three leveraged funds: the ProShares Ultra S&P 500 (SSO), ProShares Ultra DJ Financials (UYG) and the Direxion Financials Bull 3x (FAS). The trend of inflows into leveraged bull market ETFs suggest a number of investors positioning themselves for a bottom in these beaten-down markets.

ETF Inflow Leaders - February 2009
Fund	Ticker	Inflows
SPDR Equity Gold	GLD	$5,605
Market Vectors Gold Miners	GDX	$1,064
US Oil Fund	USO	$924
iShares iBoxx Corp Bond	LQD	$907
iShares Barclays TIPS	TIP	$840
ProShares Ultra S&P 500	SSO	$725
ProShares Ultra DJ Financials	UYG	$555
Direxion Financials Bull 3x	FAS	$548
SPDR Energy	XLE	$537
DIAMONDS DJIA	DIA	$367
Data from NSX. All data as of February 28, 2009.

ETFs suffering outflows were led by large established ETFS like the aforementioned SPDRs and the iShares MSCI EAFE ETF (EFA). Investors also pulled money out of a handful of inverse ETFs designed to go up when the market goes down.

ETF Outflow Leaders - February 2009
SPDR Index 500	SPY	($13,568)
iShares MSCI-EAFE	EFA	($1,383)
ProShares UltraShort DJ Real Estate	SRS	($790)
iShares Russell 2000	IWM	($782)
PowerShares QQQ	QQQQ	($724)
iShares Russell 1000	IWB	($490)
iShares Russell 1000 Growth	IWF	($490)
ProShares UltraShort S&P 500	SDS	($459)
SPDR Financial	XLF	($401)
iShares Russell 1000 Value	IWD	($382)
Data from NSX. All data as of February 28, 2009.

Comments

[MattGigEm:]

"Other funds to make the top ten on inflows were . . . three leveraged funds: the ProShares Ultra S&P 500 (SSO), ProShares Ultra DJ Financials (UYG) and the Direxion Financials Bull 3x (FAS). "

Wow. Those folks are regretting that decision . . . for now at least.

Mar 05 04:03 PM